It will probably not come as a shock to learn that I listen to a lot of podcasts. I have my staples of FT News Briefing, The Tony Kornheiser Show, and The Press Box, but I’ll also binge other shows if I’m looking to mix things up. Keep it spicy, you know? As of late, I was bingeing the Hidden Forces podcast for some reason when I came up to the episode with Luke Burgis.
Burgis is a VC dude who wrote a book called Wanting that centers on René Girard’s thesis of mimetic desire. But, I’m not gonna get into Girard’s work just yet. First I got to doing some setting up here.
What’s important is that Burgis, in hyping up his book and Gerard’s work, name drops Peter Thiel quite a bit. As though to say – “you want to read my book because it’s the philosophy of Peter Thiel, made accessible.” This raises the question of course as to why the hell anyone would want to – ironically given what mimetic desire is – mimic Peter Thiel?
You see, there seems to be a bit of a problem in that there is a collection of folks who claim adherence to some vague notion of Silicon Valley culture. These folks might live in the Valley itself, but more commonly they make up the broader start-up or ‘innovation’ ecosystem spread out all over the place. But what is the Silicon Valley culture? Is it the ethos of a bunch of jabronis coding away in a garage? What about the old Apple line, ‘Think Different’? Or is it just an appreciation for free meals and shitty clothes?
It would be easy to brush off the notion of a Silicon Valley culture, after all, aren’t they just normal people? But I don’t think that’s the case. What makes someone think that they can change the world with their little app? How does one have the hubris to raise billions of dollars in investment when their company has never turned a profit? Or millions of dollars without any revenue? There ought to be some sort of intellectual justification. A framework in which their otherwise insane behavior makes sense. But what is it?
Well, if you’re Burgis – and assumably Peter Thiel – the framework is that of Girard.
Let me be frank here. For me, Girard is just another example of American ‘thinkers’ being taken in by a Frenchman. You can think of French writers such as Lacan, Deleuze, Foucault, and Sartre as proto-typical examples of influence begotten in American circles by the power of an accent. For some God-forsaken reason, Americans will cream their jeans over the latest fashion spewing forth from the Seine. This tendency perhaps explains why Jefferson is on Mount Rushmore while John Adams is oft-forgotten.
So, what’s the deal with Girard? Well, first things first, he’s a French dude who did his PhD in History at Indiana University, bounced around for a while, landed at Stanford, and was elected to the Académie française – which is a big deal in France. He passed away in 2015. His ‘big idea’ is mimetic theory which posits that human desire is ultimately mimetic meaning that people want things because others want them. For Girard, humans lack inherent desires yet somehow we gain them via our interactions with others. He’s not a great writer so it’s not exactly clear how desires arise per se other than that they are given meaning and value by others. Anyways, this desire leads to conflict which in turn begets a need for mechanisms that can simmer the violence. One prominent example put forth by Girard is the Scapegoat mechanism. But as Adrian Daub points out in his What Tech Calls Thinking, Girard’s work is not exactly airtight:
“Believing Girard’s claims requires a very specific kind of squinting. His colleague Joshua Landy once pointedly asked just what sort of fact mimetic desire is supposed to be. If Girard’s claim were that literally all desires are mimetic, this would seem to be demonstrably wrong: What about desires that mix the necessary (meaning, features of the object) with the merely pleasing (meaning, features we might project onto them)? Wouldn’t there have to be a first desire that all other desires then mimic? Would this first desire be nonmimetic? How do we decide the medium from whom we take our desire? Wouldn’t deciding this require autonomy?
If, on the other hand, Girard’s claim were that a lot of desire is mimetic, then we’d have to ask why we need a theory to assert a truism. The idea that there are mimetic desires is so obvious that having a theory about it is like having a theory that some cats are mean...”1
It is also not clear how a knowledge of mimetic theory is meant to apply to tech and business. Again, quoting from Daub:
“In a 2009 interview with Daniel Lance from Thiel’s own institute, Thiel was asked what lessons he drew from Girard in running his businesses. His answer is revealing. He credits mimetic theory with helping him think ‘about how to avoid conflict within a business,’ to reduce ‘counterproductive’ internal disagreements. What makes that answer fascinating is that Thiel thinks mimetic theory, which, remember, claims that conflict between mirroring desires is pretty much inevitable, could actually tell us how to avoid conflict. There’s no Jesus in this story to make visible the bad effects of mimetic desire. But there are smart young people banding together to seed startups. Tech will set us free.”2
You wanna know why the take away from Thiel’s Zero to One is that competition is for losers? Because competition is another way of saying mimetic desire.
But why in a Girardian world does one do anything at all? Because they desire to do so. And what does Girard’s work tell you about those desires? That they come from a desire to imitate other and capture items that they themselves want. So, how in the shit does competition disappear? Does it not merely move from inter-firm competition to intra-firm competition? Who knows, but it is important to note that, as Daub reports, in his 2012 seminar at Stanford, the material for which became Zero to One, “Thiel at several points came close to suggesting that the CEO of a company may fall victim to scapegoating mechanisms just like the ones that felled Jesus Christ.”3 Which, let’s grab that sentiment, along with Daub’s words the ‘Tech will set us free’ and go for a little walk here.
From looking at Thiel’s vibing with Girard we get two takeaways. The first is that there is a universalizing tendency. It is not that some human desire is mimetic, it all is. The second is that technology – and those who lead technological companies – are messianic figures. The CEO can be put down like Christ while technology is meant to save us from the negative effects of mimetic desire. Both of these explain quite a bit in terms of the culture we see emanating around start-ups.
How many times have you heard a VC talk about the power of ‘visionary leaders?’ What about my favorite adjective, ‘massively scalable’? Both of these fit into a Thiel-centric worldview. Something is massively scalable because its application is allegedly universal while visionary leaders, well, that one’s pretty obvious ain’t it. While I doubt that most start-up founders, employees, and VCs are aware that their language is that of a particular philosophy, I think we can agree that the culture has drunk some of the Kool-Aid.
The notion that technology will set us free, save the world, or in the words of WeWork “elevate the world’s consciousness,” is not limited to the Thiel-verse.4 In 2014, historian Jill Lepore noted that the same line of thought appears in the notion of disruption. Her best line is that the mantra of innovation is akin to “holding out the hope of salvation against the very damnation it describes: disrupt and you will be saved.”5 Why disrupt? For money? For power? Nope. If you take ‘disruptive’ firms, such as Uber, at their word, the reasoning behind their disruption is to do shit like “ignite opportunity by setting the world in motion.”6 What exact opportunity was sitting around waiting to be kindled prior to Uber? I’m not exactly sure other than Billy Bob night lighting as a cabbie.
That’s the thing though. Start-up culture (aka Silicon Valley culture) puts monetary considerations out of view when it self-justifies. No start-up begins their pitch for funding with the line “we are going to make you so much money.” Instead, they yammer the fuck on about how they are changing the world and hyperventilating the quandary-verse. The result is the mantra that folks ought to disrupt at all costs – even if some disruption is impossible.
Take for example Uber. In the last three months ending June 30th, 2021, the company lost $1.19-billion from operations.7 This is to say that fundamentally, Uber’s services lose money in and of themselves. Indeed, Uber has never posted a positive income from operations. This is despite having a duopoly in the ride-sharing space and a strong position in food delivery, which, we can all admit, should have done gangbusters during the Rona. So what’s happening? Why is disruption going so poorly?
The premise behind Uber was that cab companies sucked. This was a true statement. Getting a cab was absolute ass. They charged a lot, did a terrible job, and had monopoly power thanks to licensing regimes. The thing is though, it is a lot easier for cab companies to adopt the convenience features of Uber – an app – than for Uber to create a rival cab company that makes money. The idea for Uber was that cab companies charged so much because of their monopoly, not because running a cab company involves a lot of expenses given the whole car thing. While cab fares were inflated, even if you remove the cost of a license/medallion, there is a minimal cost of operation that must be covered by the fare. You have to pay the driver and cover the cost of the vehicle.
What Uber – and Lyft – do is subsidize the shit out of their drivers. The price you pay is not the cost of the ride. You pay a bit, and then Uber HQ covers the rest of the cost so that the driver makes a reasonable (if that) amount from the ride. The prices are artificially low. This is why Uber loses money hand over fist every day.
If you’re Uber HQ, you tell investors and your bankers that the plan is to subsidize operations until your competition – Lyft and traditional taxi companies – run out of money. At that point, you will raise rates and print cash because there’s no one else, in theory, left to compete against you. The problem is that cab companies still exist and are able to do things like build their own apps that mimic the convenience of Uber. This leads to one of two endgames.
The first possible outcome is that Uber succeeds in driving everyone else out of business. At which point they will have monopoly pricing power akin to what the old cab system had. In that case, we are all going to end up paying roughly the same amount for cab services as we would have under the old regime. Nothing will have happened except a transfer of wealth from cab companies to Uber.
The second scenario is that Uber comes under pressure to stop hemorrhaging money and it raises its rates which allows its competitors to keep on keeping on. In which case, competition will keep prices low and trend towards the cost of operating a vehicle and paying the driver. This scenario entails Uber spending billions of dollars and several years betting that they could make it all back via future monopoly pricing power, but instead, they end up as a low margin cab company.
Either way, the disruption narrative turns out to be bunk. In the first scenario, the consumer ends up where they started. In the second, disruption becomes competition – which as Thiel will tell you, is for losers.
The frustration one feels in mulling this situation over is best articulated by The Financial Times’ Jamie Powell who recently tweeted the following sentiment about delivery start-ups:
The issue here though is that start-up culture holds disruption as an end in and of itself. The notion being that everything can, and ought to be, disrupted. Why? Because it’s for the greater good. These messianic tech-lords will bring about world peace and ‘ignite opportunity,’ if only we let them disrupt at will.
But is this vision true? If you look at the comments above about Uber, the answer sure seems to be ‘no.’ As another example, take the insure-tech company Lemonade. In their most recent quarterly report, the company only generated $23.5-million in revenue while racking up a negative cashflow from operations of $40.3-billion.8 This is despite a market capitalization of nearly $5-billion and over $1-billion in cash on the balance sheet. As I’ve written previously, the firm’s,
“actual value proposition is that they might be able to automate away the labor costs of the insurance industry while limiting the cost of ensuing mistakes caused by the misuse of AI. Strip away the buzzwords, think pieces, and bullshit LinkedIn posts and that’s all you got.”9
As is the case with the cab industry and Uber, traditional insurance companies can offer the beneficial features of Lemonade faster than Lemonade can become a big-boy insurance company. At best, the ‘disruption’ is merely a feature. Which, is not much of a disruption at all. But this has not stopped other insure-tech companies from starting up, raising capital, and going about their merry way without even a thought as to whether disruption is possible in a meaningful way.
What this blind loyalty to the idea of disruption reminds me of is the basic premise of Theranos which was that professionals in the medical industry were too stupid to simplify blood testing. This premise should have been laughed the fuck out of the room. Do you know who leads medical technology development? Folks who hold both MDs and PhDs. We send our brightest people to medical school, and for some reason we figured that noted drop-out Elizabeth Holmes was going to outsmart them. Why? Because physicians who also get doctorates in biomedical engineering focus on providing products and services that work as opposed to poetically singing the praises of disruption.
The issue here is that start-up culture’s idolization of disruption leads to nonsensical business decisions. Has disruption occurred in the past? Yes. Will it likely happen again? Yes. Is it happening right now? I would assume so. However, the cult of disruption assumes that things are done in a particular industry for silly reasons. As opposed to smart people in the field having finetuned the processes into viable businesses.
The hot new technologies over the last forty years have been computers, software, the internet, etc... Naturally, there were industries that were easily disrupted by these developments, but that is not to say that all industries at all times are susceptible to disruption. However, the culture surrounding start-ups would have you believe otherwise.
This has been a rather wild ride of an essay, hasn’t it? How ‘bout we survey where we’re at, end things for another week, and crack a Miller Lite? Alrighty, let’s go.
Silicon Valley is more than a place. It’s a culture that permeates the global start-up ecosystem. As with any culture, it has certain intellectual axioms, assumptions, and beliefs. While I don’t want to insinuate that everyone involved in start-ups and VC have drunk from the Thiel-supplied Girardian cup, the notions of mimetic desire and messianic founders are ones that are easily grafted onto the start-up space. Alongside these two notions is the unwavering belief that disruption is (1) possible, and (2) always good. Hopefully by this point in the essay you’ve at least come to the conclusion that we can doubt this precept. The question is whether or not we can – ironically – disrupt this intellectually bankrupt culture.
At the very least, if we’re going to give a large amount of credence to a theologically-minded French philosopher, might I recommend we toss Girard and pick up Jean-Luc Marion?
Photo by Mario Gogh on Unsplash
Adrian Daub, What Tech Calls Thinking: An Inquiry into the Intellectual Bedrock of Silicon Valley, (New York: Farrar, Straus, and Giroux, 2020), 85-86.
Ibid, 87-88.
Ibid, 88-89.
https://www.cnbc.com/2019/08/14/wework-ipo-filing-sells-a-romantic-vision-alongside-losses.html
https://www.newyorker.com/magazine/2014/06/23/the-disruption-machine
https://www.uber.com/ca/en/about/
https://d18rn0p25nwr6d.cloudfront.net/CIK-0001543151/bdaa01ec-4802-424c-87d6-17ab51d3fec9.pdf
https://d18rn0p25nwr6d.cloudfront.net/CIK-0001691421/f960c11e-c7d5-4297-99e6-9f13eb5ddd3f.pdf